FEATURES OF STATE FISCAL POLICY FORMATION DURING RECESSIONS
DOI:
https://doi.org/10.32782/city-development.2024.2-13Keywords:
fiscal policy, socio-economic sphere, inflation, government policy, reformsAbstract
The article analyzes the peculiarities of fiscal policy formation during recessions. The authors emphasize that a successful fiscal policy can not only stabilize the economy, but also ensure sustainable growth and improve the welfare of the population. It is proved that the effectiveness of fiscal policy depends on many factors, including the level of trust in the government, the degree of development of financial markets and the state of the global economy. In addition, there is a risk that fiscal policy aimed at short-term problem solving may have undesirable long-term consequences, such as inflation or public debt growth. The authors focus on the ability of fiscal policy to influence output through changes in aggregate demand, which makes it an important tool for economic stabilization. It is proved that the most effective economic policy usually includes a combination of discretionary and automatic instruments. Discretionary fiscal policy can be used to implement long-term strategies and structural reforms, while automatic stabilizers and monetary policy provide a more rapid response to short-term economic fluctuations. After all, an effective fiscal policy should not only maintain economic stability, but also promote long-term economic development, improve the quality of life of the population and ensure social justice. The authors prove that an effective economic policy often requires a combination of fiscal and monetary measures. Fiscal policy can provide direct stimulus to demand through spending and tax changes, while monetary policy can provide more flexible management of economic fluctuations through control over the money supply and interest rates. The proper use of both instruments helps to ensure the stability of economic growth by maintaining a balance between stimulating and restraining economic activity.
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